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ASML Q1-17 Sales: Stronger Than Expected Demand

ASML just reported their Q1-17 results:

CEO Statement"A positive industry environment provided a strong start to 2017 and healthy demand is expected to continue throughout the rest of the year. Our DUV business saw strong demand from all sectors of the industry. Our service and options business was also very strong in the first quarter, as a number of customers bought performance-enhancing upgrades for their existing immersion tools. Our second-quarter guidance shows that we expect these trends continue," ASML President and Chief Executive Officer Peter Wennink said."In EUV, which is now in a phase of industrialization, the order flow continued, taking our backlog to 21 EUV systems."

Besides the 21 EUV systems in present backlog they also reported 4 (field) upgrades of 3300/3350 to 3400. So, customers are also upgrading their present EUV (development) tools to the latest 3400 (HVM-production) version.

CFO Nickl stated in the video message that they expect to sell/ship about 20 units of the 3400 EUV tool in 2018. Also they expect memory to be stronger in 2017 than 2016.

If you compare it to LAM the ASML results are not as good. And I'm guessing that ASML will under perform the sector this quarter. TSMC is still positive about EUV in 2019 but I'm not. I spoke to some local lithographers and they seem to think that no news from ASML on EUV is bad news.

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If you compare it to LAM the ASML results are not as good. And I'm guessing that ASML will under perform the sector this quarter. TSMC is still positive about EUV in 2019 but I'm not. I spoke to some local lithographers and they seem to think that no news from ASML on EUV is bad news.

DAN, I know nothing about LAM so cannot weigh in on your remark. I can just say that whatever litho is needed the coming decade it will come from ASML it seems. So, whatever the semi industry is investing in litho, it will end up at ASML.

Listening to the conference call it seems that the conclusion that revenue will increase by some 1.5 BEuro in 2017 (from 6.8 BEuro in 2016, an increase of >20%) is not to speculative: some 800 MEuro more from EUV, some 500 MEuro more from services/field options and a couple of 100 MEuro more from DUV (memory demand is higher, logic is flat).

EUV capacity for 2018 will be filled the coming quarters (note that the time for an EUV tool is around 18 months, they want to reduce that to around 9 months in 2020), and China will start to add iArF leading tools in 2018/2019 and beyond.

The new high-NA EUV tool that is currently being developed (with Zeiss) is expected to cost>200 MEuro (2 times the 3400) as was stated by management during the conference call.

So it seems a pretty comfortable environment to work in as a (monopolist) litho company...